Unit 5 Progress Check MCQ
An economy is in short-run equilibrium as illustrated by the graph above. Which of the following combinations of policy actions would definitely move the economy toward long-run equilibrium?
A
Assume policy makers increased spending and cut taxes to stimulate the economy. If the government's budget was initially in balance, which of the following will occur?
A.
Use the graph below of a long-run Phillips Curve and a short-run Phillips Curve to answer the question
A.
Which of the following changes is most likely to cause economic growth?
A.
Which of the following terms describes the adverse effect that results when private sector investment spending competes with government deficit financing?
A.
An open-market purchase of government bonds accompanied by a decrease in income taxes will result in which of the following in the short run?
C.
How will a nation's production possibilities curve (PPC) and long-run aggregate supply (LRAS) curve change as a result of an increase in both the labor force and productivity?
C.
Steady advances in technological development will result in which of the following?
C.
Suppose the nominal GDP is 25 million, the price level is 1.25 , and the central bank has set the money supply at 10 million. What is the real GDP and the velocity of money according to the quantity theory of money?
D
An increase in the expected inflation rate will cause which of the following?
B.
Assume an economy is in long-run equilibrium and the central bank engages in an expansionary monetary policy for a prolonged time period. If the velocity of money is constant, which of the following is true according to the quantity theory of money?
B.
Suppose a country's government increases the allowable deduction for individual retirement accounts per person. Holding all other influences constant, how would this policy action affect the country's loanable funds market, its production possibilities curve, and its long-run aggregate supply (LRAS) curve?
B.
Suppose that an economy with flexible wages and prices is in long-run equilibrium when the central bank contracts the money supply. What is the long-run effect on real output in the economy?
B.
Which of the following policies will most likely promote long-run economic growth?
B.
Use the graph below of the long-run Philips Curve (LRPC) and the short-run Phillips Curve (SRPC) to answer the question.
D.
Which of the following describes a surplus in the government budget?
D.
Which of the following will most likely occur if a country's government is continuously borrowing to finance its spending without changing taxes?
D.
Country X's economy is in an inflationary gap. Which of the following combinations of fiscal and monetary policy actions would restore full employment in the short run?
E.
If economic growth through investment in the economy's infrastructure is desirable, which of the following policies will most likely achieve this objective?
E.
If tax revenues are less than the total of government spending plus government transfer payments, which of the following will happen?
E.
To reduce the size of a country's national debt, a government could potentially take all of the following actions EXCEPT
E.